Mobile Money, Agricultural Intensification, and Household Welfare: Panel Evidence from Rural Uganda

Abstract

We examine the impact of the rapidly expanding mobile banking service “mobile money” on rural households’ decision to adopt modern agricultural inputs and its resultant effect on agricultural income using plot, household, and community-level panel data from rural Uganda. The main findings indicate that mobile money adoption increases per capita farm income by 13%. Pathway analyses show that mobile money adoption increases the likelihood of using chemical fertilizer on maize plots by 11 percentage points. Mobile money adoption increases the likelihood of high-yielding maize seeds adoption on maize plots by 8.2 percentage points. In the Ugandan context of rapid decline in soil fertility and very low adoption of fertilizer and modern seeds, mobile money provides an avenue to finance agricultural intensification.

From expanding financial services to tackling poverty in West African Economic and Monetary Union: The accelerating role of mobile money

“…This article contributes to the empirical literature by effectively comparing the magnitude of the effects of the type of mobile money usage including, saving, remittance, credit or the combination of them on poverty. Most of the existing studies have evidenced the effect of each type of mobile money usage on wellbeing in developing countries (Abiona & Koppensteiner, 2022; Batista & Vicente, 2021; Jack & Suri, 2014; Khaki et al, 2022; Kikulwe et al, 2014; Ky et al, 2021; Lee et al, 2023; Munyegera & Matsumoto, 2014; Munyegera & Matsumoto, 2016; Murendo & Wollni, 2016; Riley, 2018; Senou et al, 2019b; Tabetando et al, 2022; Wang & He, 2020). Almost all of these studies agree on the positive effect of mobile financial services on household welfare including reduced transaction costs, increased household income and consumption as well as food security but failed to effectively compare the effects.…”